HDFC Bank is seen posting 30-32 per cent growth in its net profit for Q3 FY24, led by a 27 per cent increase in net interest income on the back of healthy loan growth. Shares of the bank were trading around 1 per cent lower ahead of the results scheduled post market hours today

However, margins are seen under pressure owing to the elevated cost of funds, and could moderate to 3.3-3.4 per cent, analysts said.

Higher operating expenses due to implementation of the merger and branch expansion is also seen weighing on the bottomline. Portfolio quality is seen stable, keeping credit costs under control.

Loan growth for the private sector lender has remained healthy in Q3; however, slower deposit growth is expected to keep overall cost of funds higher and management guidance on the same will be keenly eyed.

Provisional numbers declared by the lender show gross advances rose 62.4 per cent y-o-y to Rs 24.7 lakh crore as of December 31, 2023. Sequentially, credit growth was at around 4.9 per cent. The jump in annual figures is on account of the merger of erstwhile parent HDFC effective July 1, 2023.

Domestic retail loans grew 111 per cent, commercial and rural banking loans rose 31.5 per cent, and corporate and other wholesale loans (excluding non-individual loans of the erstwhile HDFC Ltd) by 11 per cent.

Deposits of the lender rose 27.7 per cent yoy to Rs 22.14 lakh crore at the end of December, led by a 28.4 per cent increase in retail deposits and 24.4 per cent increase in wholesale deposits. Sequentially, deposit growth was 1.9 per cent on the back of a 2.9 per cent rise in retail deposits and 3.4 per cent in wholesale deposits.

HDFC Bank’s CASA ratio stood at around 37.7 per cent at the end of the reporting quarter, marginally higher than 37.6 per cent a quarter ago, but lower than 44 per cent in the year-ago period.